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HM Treasury News Release

170/99

26 October 1999

A BETTER DEAL FOR DISABLED PEOPLE

Gordon Brown and Alistair Darling Launch the Disabled Person's Tax Credit

DPTC will guarantee a minimum income of £230 for a family with someone in full-time work and with one child - at least £80 for couples and £120 for lone parents more than the family would get on benefits.

A family with two young children earning £13,000 will be £2,500 - £45 a week - better off. The introduction of DPTC will not only make work pay but increase employment opportunities for disabled men and women.

Launching DPTC at the Leonard Cheshire Foundation in London, the Chancellor said:

"Today with the introduction of the Disabled Person's Tax Credit, we are seeking to re-establish the right to work that disabled men and women should have.

"We know that there are one million disabled men and women who want to work.

"DPTC is one of a number of measures that will make work easier and worthwhile for disabled men and women."

At the launch Social Security Secretary Alistair Darling said:

"The DPTC provides a major boost to those disabled people who in the past have been excluded from the workplace. We are determined to do everything we can to help disabled people who want work to do so - and make sure that it pays to work.

"We are also doing far more to help people who can't work - helping those who need help most. That's why we have introduced more help for young severely disabled children and a disability income guarantee. We're doing more to help people who want to work - and more for those who can't."
The DPTC is part of a package of measures that will make work worthwhile and easier. As well as DPTC the package includes:

*the £195 million New Deal for Disabled People which provides personal advice and support to 250,000 disabled people who wish to move into work and £5 million set aside for innovative pilots to test new ways to help;

*through the Job Introduction Scheme, employers can receive a 6 week subsidy (13 weeks in exceptional circumstances) to take on disabled employees. Together with the Access to Work support, this is an additional £30 million package for specialist disability services;

*the linking rule, which allows a disabled man or woman on longer term incapacity benefits to return to the same level of benefit within 12 months if the job does not work out; and

*the setting up of a Disability Rights Commission to work towards the elimination of discrimination against disabled people.

DPTC will be paid through the wage packet from April 2000 and should reduce the stigma of claiming in-work support as well as showing the reward of work over welfare.

From October 2000, there will be a new fast track gateway which will help people who become disabled while working to remain in work, by widening access to DPTC to people who have been sick for 20 weeks, if their condition is likely to last another six months, and their earnings are to be reduced by 20%. People who become disabled while working are most likely to find work with their existing employer, and the longer someone is out of the labour market the less likely they are to return to work.

NOTES TO EDITORS

The New Deal for Disabled People is funded with £195 million from the windfall tax. Participation is voluntary. The client group for the welfare-to-work measures includes 2.2 million people of working age with a disability or long-term illness who receive Incapacity Benefit, Income Support/Housing Benefit/Council Tax Benefit; or Severe Disablement Allowance.

Government measures which have been introduced, as well as DPTC, to help disabled people include:

*New Deal for Disabled People - £195 million to help disabled people who want to get work;

*Benefit linking rules - a new 52 week linking rule from October last year will protect people's entitlement to incapacity benefits for up to a year;

*DSS are also piloting help through a job-finders grant worth £200 and job a job-match payment worth £50 a week for to six months;

*The Disability Rights Commission - to help eradicate discrimination against disabled people;

*Extra help for disabled children - an additional £25 million for severely disabled 3 and 4 year olds who get an extra £37 a week;

*Changes in Incapacity Benefit to help young people - an additional £20 million to provide an extra £26 a week for people disabled before age 20.

The Leonard Cheshire-led Workability scheme is a national welfare to work programme for disabled people funded by the Government's New Deal for Disabled People. Set up as a Golden Jubilee project by Leonard Cheshire, the UK's largest charity organisation caring for disabled people, Workability is equipping disabled people with ITC skills to help them in their search for jobs.

If you have access to the Internet you can find this news release and other Treasury information at http://www.hm-treasury.gov.uk

DISABLED PERSON'S TAX CREDIT

What makes it so different from DWA?
It's paid through the wage packet as a 'tax credit' - so people don't need to go to the benefits office to claim it. The Inland Revenue, and not the DSS, will be administering the tax credit. It is more generous than Disability Working Allowance (DWA) which it replaces, and it includes extra money towards childcare costs.

Why is the Inland Revenue involved? They normally take money away, not hand it out.
The new system is a tax credit - not a benefit - and so it makes sense for the Inland Revenue to be responsible for it. As it's paid through the wage packet, more people are likely to claim it, and will be less likely to feel like they're getting a benefit hand-out.

When does it come into force?
It came into force on 5 October this year. An advertising campaign launched last month gives information about the new system, with a freephone number for people to ring for further information. The number is 0800 597 5976.

How do I know if I'm eligible for DPTC?
You're eligible for DPTC if:
- you work at least 16 hours per week;
- you have one of a range of incapacity or disability benefits or have been receiving certain benefits in the 182 days prior to your application (this is more generous than DWA, where the limit was 56 days);
- you have savings of £16,000 or less;
- you are resident in the UK.
DPTC is available to people who are self employed as well as those who are employed.

How much money will I get?
The amount of DPTC that you will get depends on your circumstances ie. Your income, the number of hours you work each week, how much you pay in childcare if you have children. The Inland Revenue will work it out for you.

How long does the award last for?
The award lasts for 26 weeks even if circumstances change. This is the same as for DWA. After the 26 weeks is up, if you are still entitled you can send in another application.

Can you give me any examples?
DPTC will guarantee a minimum income of £230 for a family with someone in full-time work with one child - at least £80 for couples and £120 for lone parents more than the family would get on benefits.

How can I find out if I'm eligible?
You can ring the freephone number - 0800 597 5976 - to find out if your eligible and to be sent application forms. The Inland revenue will do the rest. For more information and general advice, ring the Tax Credit Helpline on 0845 609 5000.

I get maintenance payments. Will these be taken into account?
No. Neither maintenance payments nor Child Benefit will be included in the income calculation for DPTC. This means that you can keep any maintenance you get on top of DPTC.

What about the CSA?
In the past DWA claimants had to co-operate with the CSA to ensure they got any maintenance they were entitled to. This is no longer the case with DPTC.

Can I get money to help with childcare costs?
You'll get help with this too. If you pay for registered childcare, the childcare tax credit it is worth up to 70 per cent of eligible childcare costs up to a maximum of £100 for families who pay for childcare for one child, and £150 for childcare for two or more children.

When will I start to receive the DPTC?
Payments started to be made on 5 October. Some people currently receiving DWA have already put in an applications for DPTC.

How will the tax credits be paid?
From 5 October applicants will be paid direct by the Revenue. You can be paid directly into your bank account every fortnight in arrears, or have an order book to cash every week at the Post Office. From April next year, payment will be made to most employees direct through the wage packet. People who are self employed or not working (the non-earning partner) will continue to be paid via the bank or an order book.

What happens if I already get Disability Working Allowance?
You cannot be paid DWA and DPTC at the same time. Those people who are already receiving DWA will continue to receive it until the end of the 26 week award period. They will then be automatically transferred on to DPTC system. They will get a DPTC application about a month before their DWA runs out.

Where can I get further information about DPTCs?
Leaflets are available from:
- the Inland Revenue's FREEPHONE response line 0800 597 5976
- Inland Revenue Enquiry Centres
- Employment Services Jobcentres
- Benefits Agency offices
- Post Offices
- Citizen's Advice Bureaux
- 22,000 order forms have also been sent out to other organisations such as nurseries.

Where can I get an application form?
Applications are available from:
- the Inland Revenue's FREEPHONE response line 0800 597 597 6
- Inland Revenue Enquiry Centres
- Employment Services Jobcentres
- Benefits Agency offices

Who do you contact about an application you've already made?
Once you have sent off your application you should deal with the Inland Revenue's Tax Credit Office (TCO). You can write to them at:
England, Scotland & Wales Northern Ireland
Tax Credit Office Tax Credit Office
Inland Revenue Inland Revenue
PO Box 145 Dorchester House
Preston Great Victoria House
PR1 0GP Belfast
BT2 7WF
Or you can telephone at local rate on:
Tax Credit Helpline 0845 609 5000
Tax Credit Helpline Textphone 0845 606 6668
Northern Ireland Tax Credit Helpline 0845 609 7000
Northern Ireland Tax Credit Helpline Textphone 0845 607 6078

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